The Dow Jones Industrial Average slipped 7.36 points, or 0.06 percent, to close at 13,164.78. The blue-chip index moved in a 55-point range, logging its second narrowest trading range this year. Merck and Intel led the decliners, while BofA finished higher.

The S&P 500 eked out a gain of 1.60 points, or 0.11 percent, to end at 1,405.53. The Nasdaq edged up 13.95 points, or 0.46 percent, to finish at 3,030.93.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, slid below 15.

"If the NYSE can sustain its outperformance today, perhaps we can reach the Promised Land of 1,422 on the S&P by Friday," wrote Elliot Spar, senior vice president at Stifel Nicolaus in his daily note. "Let’s get there already so we can get some people off the sidelines one way or the other."

For most of the week, equities have been drifting sideways, with the S&P 500 latching onto its position above 1,400. Volumes have also been extremely light due to seasonality and little news from Europe.

“The economic data in the last two weeks have been better and we’re getting some chatter that QE is not necessarily coming down the pipe,” said Jeff Cleveland, senior economist at Payden & Rygel. “Right now, the equity market’s sort of like a child throwing a tantrum, because it wants more QE.”

On the economic front, consumer prices were flatfor a second-straight month in July, according to the Labor Department, giving the Federal Reserve room for further monetary stimulus.

A gauge of manufacturing in New York state unexpectedly contracted in August for the first time since October 2011, according to the New York Federal Reserve.

On the upside, U.S. homebuilder sentiment index rose to its highest level in more than five years, according to the National Association of Home Builders. Still, homebuilders remained in the red, including KBHome and Meritage.

And industrial output climbed in July, according to the Federal Reserve, matching expectations. But figures for June were revised down. (Watch: Economy Showing Signs of Growth)

“We’re seeing signs of a healing process, but it’s not happening fast as people want,” said Cleveland, adding that he will be watching the minutes from the FOMC meeting next week on the types of additional easing the central bank could undertake. (Read More: Bernanke Losing His Chance to Ease Before Nov. Election)

Fed Chairman Ben Bernanke is scheduled to speak at a conference in Jackson Hole, Wyoming at the end of the month, while the Fed's committee on monetary policy is set to gather in September.

The office of New York State Attorney General has issued subpoenas to a number of banks including JPMorgan , Barclays and UBS on Libor, according to reports.

Apple slipped into negative territory after rival Samsung Electronics announced its new Galaxy Note 10.1 will go on sale in the U.S. starting Thursday, in an attempt to derail the iPad maker's dominance in the tablet market.

Among earnings, Target posted flat earnings but boosted its full-year forecast, thanks to more customers shopping at its expanded food sections.

Abercrombie & Fitch jumped to lead the S&P 500 gainers after the teen retailer posted earnings that topped the tepid guidance it provided two weeks ago, but the company warned that sales would be tepid throughout the back-to-school and holiday seasons. Meanwhile, the company announced it was boosting its stock buyback authorization to just over a quarter of its outstanding shares.

Staples dropped almost 15 percent after the office-supply retailer missed quarterly results and cut its outlook for the year.

Cisco , Applied Materials and Limited Brands are expected to report after the closing bell.